decision timing from decision innovation
DESCRIPTION
Decision timing is a key factor in getting the most value from your decision making efforts. This presentation addresses some of the common decision traps, biases, and errors associated with determining when a decision must be made. Learn more at: http://www.decision-making-solutions.com/business_decision_making.htmlTRANSCRIPT
© 2009 – 2013 Decision Innovation, Inc. – All Rights Reserved.
Gary DeGregorio
Keith TenBrook
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Gary DeGregorio ◦ As a career executive with Motorola, Gary worked in the field of
business software applied research for over fifteen years with a focus on decision making, decision-based software and collaboration frameworks. With a strong focus on innovation, Gary developed an approach for creating knowledge in the context of a decision framework.
◦ These experiences, coupled with a strong personal vision for leveraging the value of decision tools in both personal and business decision making, led Gary and Keith to build and launch Decision Innovation, Inc.
Keith Ten Brook ◦ Keith brings a successful executive business career in leading teams
to develop new and innovative products. He built a successful career with Motorola and Northrop Corporation where he leveraged his engineering strengths to lead teams in creating new technologies and products.
© 2009 – 2013 Decision Innovation, Inc. – All Rights Reserved. 3
“Time plays a role in almost every decision. And some decisions define your attitude
about time.”
- John Cale (1942 - ), Welsh Musician, Composer, and Singer-songwriter
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Mere seconds for first responders
Minutes to choose what to eat
Hours to days for a significant purchase
Weeks to months for a large investment
Months to years for strategic decisions or major life choices
When is the decision or resolution needed?
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Val
ue
Time
Increasing knowledge
Decreasing benefit or increasing
loss
Best Time to Decide
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Shooting from the hip - plunging in (Russo, Schoemaker, 1990) without adequate information
Planning fallacy - the bias toward underestimating how long actions will take
Primacy effect - the tendency to weigh initial events more than latter events which would promote a quicker decision
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Immediate gratification - people tend to prefer immediate payoffs over later payoffs, and this increases as payoffs get closer
Neglect of risk - the inclination to completely disregard probability or risk when making uncertain decisions
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Herd instinct - common bias to adopt the views and follow the behaviors of the majority
Shortsighted shortcuts (Russo, Schoemaker, 1990) - relying too heavily on convenient facts or easily obtained information
Reference:
Russo, J., & Schoemaker, P. (1990, October). Decision Traps – The Ten Barriers to Brilliant Decision-Making & How to Overcome Them.
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Analysis paralysis or information bias - the tendency to seek information that can not affect the outcome or being more focused on the process than the result
Procrastination - waiting too long to gather information
Maintaining the status quo or complacency
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Recency effect - the mistake of weighting recent events higher than earlier events which could encourage a delayed decision
Normalcy bias - rejecting the need to react or plan for a failure or disaster that has never happened before
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Goal is to find the balance between the needed knowledge to choose effectively while minimizing the value lost due to decision delay
Generally, gathering the information that would enable objective evaluation of the alternative solutions can be difficult and costly
Optimum is rarely achieved in practice
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Acquiring the internal knowledge (individually or within an organization) that would characterize the success factors or goals for the decision is a minimum that must be achieved to have any hope for making an effective choice
Not obtaining this more easily gathered internal knowledge is like starting a search without determining what you are looking for
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Difficult and complex decisions can often lead to large information gathering efforts
Often this is a result of exposing how little is known about possible consequences of decision alternatives
In this case, some effort is needed along a solution path to expose what "we don't know we don't know"
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Initiate lower cost exploratory efforts along the paths of solution alternatives where high uncertainty exists
Make the decision and proceed along the preferred solution alternative with checkpoints in place that would force a new decision based on new knowledge
Take actions to reduce the known negative consequences resulting from the decision delay
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From Bill Jensen's book “Simplicity - The New Competitive Advantage” – 5 questions that, when answered, led to action: 1. How is this [decision] relevant to what I do? 2. What, specifically should I do? 3. How will I be measured, and what are the consequences? 4. What tools and support are available? 5. WIIFM - What’s In It For Me? For us?
Question #4 was identified as being the most important, suggesting the increasing need for decision making tools that can help deal with the cognitive overload that results from information that is doubling every three years.
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1.Frame 2.Innovate 3.Decide 4.Manage
Manage
TM
Our 4-Step Process:
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